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Thursday, 25 October 2012 15:17

NADA to automakers:Stop Unfair Business Practices

(DETROIT) -- Bill Underriner, chairman of the National Automobile Dealers Association, outlined two contentious factory issues facing new-car dealers and urged automakers to support a level playing field for dealerships of all sizes.

"Two-tier pricing and mandatory facility upgrades are symptoms of a bigger overall problem--manufacturer intrusion into dealers' businesses," Underriner said Tuesday in remarks to the Automotive Press Association in Detroit. "NADA wants the automakers to stop unfair practices."

This past summer, the National Automobile Dealers Association created a special dealer task force to focus on the fairness of stair-step programs, also referred to as two-tier pricing, which is a manufacturer-to-dealer incentive tied to sales goals.

The NADA has also commissioned its second study on factory-mandated dealership renovation programs to analyze the return-on-investment. These programs often require a dealer to invest millions of dollars.

According to Underriner, these days, new-car dealers help drive the American economy by employing nearly a million people with jobs that can't be outsourced overseas, generating 14-percent of the company's sales tax revenue. The economic impact of a single dealership includes:

--payroll

--payments to suppliers and independent contractors

--health benefits

--taxes: payroll tax, sales tax, property tax and income tax

 

Submitted by Robert Benko